Maruti Udyog

Mumbai, Apr 13 (UNI) Maruti Udyog Ltd (MUL) and its subsidiary, Maruti Suzuki Automobile India Ltd (MSAIL), will merge to add value for shareholders and eliminate all potential issues relating to inter-company transactions.

The Maruti Udyog holds 70 per cent stake in MSAIL while Suzuki Motor Corporation (SMC), Japan, holds the remaining 30 per cent.

Maruti will buy out the entire 30 per cent stake held by SMC in MSAIL, a company release issued here today said.

In the original arrangement finalised in September 2004, MSAIL was set up as a subsidiary to operate the new car plant in Manesar.

MSAIL was always meant to be only a manufacturing company, with its other functions like sales and marketing, procurement of materials and Research&Devlopment entrusted to Maruti Udyog.

SMC Chairman S Nakanishi said, ''The merger of MSAIL with MUL will create value for all stakeholders. It will retain all the benefits of the earlier arrangement and enable the management to focus on critical issues of business operation.'' The new car plant at Manesar is coming up at an investment of Rs 1,524.2 crore with an initial capacity of one lakh cars per annum, and plans to scale it up to 250,000 cars per annum by 2008-09, he said.

Commercial production will begin on schedule, by the end of this year, the release added.

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